The Central Bank of Russia decided to maintain interest rates at its recent meeting.

The Russian ruble remained stable over the past week following reports that a Russian delegation would participate in negotiations with Ukraine and the United States to discuss ceasefire terms. This news came after the U.S. administration pledged to mediate a peace agreement, boosting investor confidence that the negotiations could be successful in mitigating ongoing economic damage. Additionally, members of former President Trump's administration have expressed support for the potential lifting of sanctions imposed since 2022, which have restricted Russian exports and access to global financial markets, significantly reducing demand for the ruble.

Russia's annual inflation rate rose to 9.9% in January, up from 9.5% in the previous month, marking the highest level since 2023. This increase aligns with the Central Bank of Russia’s forecast that inflation would approach 10% during the transition into the new year, driven by a weakening ruble. Moreover, a labor shortage resulting from military mobilization and increased government spending has contributed to a renewed surge in inflation.

The Central Bank of Russia kept its interest rate at a record-high level of 21% in its February meeting, in line with market expectations. The central bank stated that inflation remained excessively high, while domestic demand remained strong relative to the country’s production capacity. Additionally, borrowing costs have risen amid historically low unemployment. However, inflation remains the key factor influencing the central bank's interest rate decisions.

Russia’s GDP grew by 4.1% in 2024, supported by increased government spending and rapid military investments amid the ongoing war with Ukraine. Government spending expanded by more than 4.5%, up from 3.8% the previous year, while military-related investments in personnel and weaponry surged by 10.2%, compared to 7.7% previously. Meanwhile, household spending grew by 5.5%, indicating a slight slowdown as high inflation forced consumers to contend with rapidly rising interest rates.

Russia recorded a trade surplus of $5.6 billion in December 2024, a sharp decline from $10.9 billion in the same period the previous year. This was the lowest trade surplus since 2020, driven by a steep 19.2% drop in exports, which fell to $31.3 billion. The decline was largely due to weakened energy demand from China, Russia’s primary commodity export market following Western sanctions. Meanwhile, imports also declined by 7.5% to $25.7 billion. The drop in imports was influenced by the weakened ruble, which increased production costs, while the overall economic slowdown dampened household and business purchasing power.

Russia's unemployment rate stood at 2.3% in December, with the number of unemployed individuals decreasing to 1.788 million from 1.797 million. A growing labor shortage has affected all sectors, exacerbated by mass military conscription and migration, leading to a sharp decline in the domestic workforce and resulting in the lowest unemployment rate on record.

Techical analysis data (5H)

Resistance: 92.2412, 92.7837, 93.5174

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 90.2313 - 90.965 but cannot break the support at 90.965, you may set a TP at approximately 92.7837 and SL at around 89.6888 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 92.2412 - 92.7837, you may set a TP at approximately 93.5174 and SL at around 90.2313 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 92.2412 - 92.7837 but cannot break the resistance at 92.2412, you may set a TP at approximately 90.2313 and SL at around 93.5174 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 90.2313 - 90.965, you may set a TP at approximately 89.6888 and SL at around 92.7837 or according to your acceptable risk.

Pivot point February 18, 2025 09:15 PM. GMT+7